By Siddhant Mishra
Auto stocks fell on Friday, taking the S&P BSE auto index down by 1.3%, after the wholesale despatches data for November disappointed the Street. Maruti Suzuki and Mahindra & Mahindra (M&M) were among the biggest drags on the sectoral gauge. The M&M stock lost 2.6% while the Maruti stock gave up 2.3%. Among two-wheeler stocks, Eicher Motors fell 3.2%, while Bajaj Auto was down 1.8%.
On a month-on-month basis, wholesale desptaches in November were subdued, showing a double-digit drop across two- and three-wheelers and commercial vehicles.
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Passenger vehicles (PVs) saw a single-digit fall. While the November volumes were expected to be smaller than for October, since the latter is a festive month, analysts noted the build-up of volumes, especially for entry-level passenger vehicles and two-wheelers,was worrying.
Analysts at ICICI Securities wrote that while retail sales were strong, suggesting an improvement in rural demand, the wholesale despatches of mass-market two-wheelers were impacted by destocking of inventory.
Although car manufacturers have announced price hikes,some of which will kick inearly next year, some analysts believe that could impact volumes, especially for the entry-level segment.
